After the market closed, CSCO announced earnings that, combined with their forecast, good enough and the stock rallied about 1%. We'll see what the morning brings.
Here are the headlines from today:
Oil Likely to Reach $150 to $200Fannie Mae to Raise $6 Billion After Posting Loss
GE to Stop Financing Boat, Motor Home Purchases Legg Mason Hit By First Loss in 25 Years (Legg Mason is a fund manager) DR Horton Swings to $1.3 Billion Loss (DHI is a homebuilder)There may have been some more bullish headlines but these are not normally thought of as bullish. Well, at least not to us. But, in the crazy world of high finance, the bad news is "now behind us" so it must be onward and upward.
We're really not that concerned with a day like Tuesday, it is simply a natural reaction to being sold early. There really is no where to go but up, on the day anyway. The news from FNM was sold in the morning and FNM itself took a hit in the early going, down about 2 points (7%). By the end of the session FNM traded up nearly 9%. It must really have been a buy. When you consider they will be able to raise $6 billion to help their capital position, the company must be solid (oh, that sarcasm is back).
Our take on the day is that the last of the bulls wants to own some stock and thought the dip in the morning was for them to buy. These are the same kind of days we saw near the lows, where the sellers came in on up days because "don't you know that the market is going down?"
Again, we are patient. The highs of last Friday morning are somewhat in jeopardy in a couple of the indexes we follow but we do not think a break above them will amount to much. But, we do keep a close eye on those developments because we want to see if there is a divergence in the broader indexes indicating weakness. Our leading index, the FSI, showed some weakness on Tuesday which is a bearish sign.
FSI: 95.25 (down on an up market day, bearish action indeed)
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